FTX.US loses its president but prevails in an auction for Voyager’s digital assets.

FTX has won the auction for Voyager Digital’s digital assets, while the president of the cryptocurrency exchange’s US operation is the latest to be booted.

The West Realm Shires Inc., aka the Bahamas-based FTX’s U.S.-facing offshoot FTX.US, submitted “the highest and best bid” for the bankrupt Voyager’s assets late Monday, according to Voyager. Voyager filed for Chapter 11 bankruptcy in July. It was one of many companies that lost money because of Terraform Labs’ algorithmic stablecoin and the collapse of the Three Arrows Capital (3AC) “crypto” hedge fund.

The offer from FTX.US is valued at “approximately $1.422 billion,” with the majority ($1.311 billion) representing “the fair market value of all Voyager cryptocurrency.” The actual value of these tokens will be determined at “a later date to be determined.” The bid also includes approximately $111 million in “incremental value,” which is FTX’s only new money.

When 3AC went bankrupt, it was said to owe Voyager more than $650 million, and Voyager said on Monday that its claims against 3AC “remain with the bankruptcy estate, which will distribute any available recovery against such claims to the estate’s creditors.”

The FTX.US bid, according to Voyager, “maximizes value and reduces the remaining duration of the company’s restructuring by providing a clear path forward for the Debtors to consummate a Chapter 11 plan and return value to their customers and other creditors.” Voyager seemed to confirm that its former customers’ assets would be moved to FTX accounts when the Chapter 11 process was over.

Voyager went on to say that FTX.US won after “multiple rounds of bidding in a highly competitive auction process that lasted two weeks.” The Wall Street Journal had said before that FTX and another exchange, Binance, were the most likely to buy Voyager’s assets. At the time, the bids were said to be in the $50 million range.

Voyager had turned down FTX CEO Sam Bankman’s “lowball bid disguised as a white knight rescue” in the past, but it looks like desperate times call for desperate measures.

The FTX.US transaction still needs to be approved by the New York bankruptcy courts as well as a creditor vote. The plan will be presented to the court on October 19, with the creditor vote taking place at a later date. There’s no guarantee that creditors will be as eager to hand over the keys to SBF’s kingdom as Voyager appears to be.

Goodbye, Chicago. Harrison, Brett

In other FTX news, SBF announced on Tuesday that FTX.US‘s corporate headquarters would be relocated from Chicago to Miami. FTX first set up shop in the Windy City in June 2021. The downtown Chicago office, which is 9,000 square feet, was officially opened four months ago with a lot of fanfare and the presence of Mayor Lori Lightfoot.

Many of FTX.US’s Chicago-based employees are undoubtedly still reeling from the surprise announcement, which SBF attempted to justify by stating that remaining “agile and coordinated is a core value.” Perhaps agile. Coordinated? Tell that to the employees who were unexpectedly asked to relocate to an active hurricane zone.

Brett Harrison, president of FTX.US, announced Tuesday that he will step down in the coming months but will remain with the company in a “advisory role.” Harrison, who has only been president since May 2021 and previously described his position as an “opportunity of a lifetime,” admitted Tuesday that “this industry is at a number of crossroads” due to the “increasing fragmentation and technological complexity of the market’s landscape.”

The Federal Deposit Insurance Corporation (FDIC) publicly chastised FTX.US in August for falsely informing customers that their crypto deposits were FDIC-insured in the event of a disaster. The FDIC has warned the public that it does not insure “crypto-related products,” and that anyone who tells them otherwise—including Voyager Digital—is lying through their teeth.

Harrison tweeted that direct deposits from customers’ employers were held in FDIC-insured accounts in their names. Harrison later deleted the tweet and claimed that FTX “really didn’t mean to mislead anyone,” but intentions are less important than the impression FTX left with its customers.

In a video interview with Bloomberg on Tuesday, SBF appeared unmoved by Harrison’s departure, saying only that a change “had been in the works for a while” and that it’s “important that we go in directions that we feel best in.” Given that Harrison had only been on the job for 17 months and that his departure had been planned “for a while,” it’s worth wondering what he found when he peered behind the FTX curtain that scared him so much.

For example, the Financial Conduct Authority (FCA) of the United Kingdom issued a warning last week that FTX was “targeting” U.K. customers without authorization and urged customers to avoid it. SBF initially blamed it on “scammers” posing as FTX, but the Financial Times later reported that the warning was indeed directed squarely at FTX. Even though SBF said that his company had been talking to the FCA about licensing for a long time, the warning was still sent out.

Crypto corner suites become dead ends.

With a few exceptions, leaders of US-licensed exchanges have not lasted long in their positions. After only three months on the job, Brian Brooks stepped down as CEO of Binance.US, sparking rumors that he’d been led down the garden path in terms of Binance. Independence US’s controversial mothership. (Brooks’s predecessor was in charge for two years and then disappeared, almost as if she thought she would get in trouble for running a business that didn’t follow the rules.)

Harrison is the latest in a long line of departing crypto executives who have apparently decided that the current crypto winter isn’t going to end anytime soon, and it’s no fun being the guy who sinks with the ship after hitting an iceberg.

On Tuesday, news broke that Alex Mashinsky, CEO of bankrupt crypto lender/Ponzi scheme Celsius, had resigned from his position, adding to the crypto corner suite exit parade. Mashinsky issued a statement in which he expressed “regret that my continued role as CEO has become an increasing distraction” and apologized for the “difficult financial circumstances that members of our community are facing.” Sentences that no one believed to be genuine.

To be honest, it’s as if all the swindlers have decided that the jig is up and it’s best to get out now before the road out of Dodge begins to resemble a Russian border crossing. Hopefully, criminal charges will be filed against Mashinsky before he flees the country and receives his own Interpol Red Notice.

Then we learn that SBF is looking to raise another $1 billion in order to purchase Celsius. Seriously, at this point, just hand over control of “crypto” to SBF so he can begin negotiating with Walmart for the rights to the “Sam’s Club” trademark. Then plunge the entire shady enterprise into a deep, deep hole.